Plot: Chu Chung takes refuge in an old ruin. His arranged betrothed Liu Su-Su follows him there but he does not desire her. The two encounter the monk Reverend Wick. Chu is drawn to a painting on the wall, which opens up to take him into the afterlife where he falls into the arms of I-Meng. Su-Su is then captured by her Ladyship who rules the afterlife. Ladyship tricks Chu into using his powerful yang force and killing the god Chia Yuan, something that gives her total dominion over the afterlife and the power to rule Earth. As Ladyship makes Chu her sex slave, intending to drain his lifeforce, Su-Su and Wick try to save him.

This was the third and so far final in the series of films begun with Erotic Ghost Story (1990). Erotic Ghost Story was somewhat confused in its attempts to marry erotica and the supernatural stylistics of A Chinese Ghost Story (1987) but the series peaked with the immediate sequel Erotic Ghost Story II (1991) in which the combination came about with considerable imagination and wit. (There was a fourth film Erotic Ghost Story  Perfect Match (1997), although this is an entry from another company posing as a sequel and is unrelated).

Alas, Erotic Ghost Story III proves to be the weakest of the three films. The continuing threat of the demon Wutung is no longer present and, in fact, there is nothing in this film that connects it to the preceding two. Unlike the other films, this one also takes itself relatively seriously for the most part. The various erotic trysts  the lengthy scene where the hero and I-Meng couple and the subsequent lesbian sequence with the two sisters  are all conducted straight-face. They go on far too long, even as erotic titillation, and are eventually rather boring. It is only the better polish of photography and lighting and the ravishing set dressings that set Erotic Ghost Story III above the various sexual set-pieces that occur in video-shot pornographic films. Certainly, the erotica is much better directed here than in the first film. However, when the film serves up the rape of the two sisters with the same sort of erotic focus that it does their earlier couplings it puts itself in a dubious light.

There is however one very funny sequence where the priest shrinks himself to miniature size and then climbs up the matrons pubic hair only to become trapped inside her vagina. It is here that the film attains something of the zany surrealism of the second film, although this is the only point where it does. The film does eventually arrive at a modestly entertaining full-fledged Wu Xia climax.